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Thread: risks of accepting international wire transfers?

risks of accepting international wire transfers?

What are the potential risks of accepting an international wire transfer to pay for goods purchased on an ecommerce site? You'll have to supply your account number to the customer, but is that really dangerous?

For whatever reasons, our website seems to attract a lot of international attention. Of course, we would like to accommodate international customers and have been doing so by accepting their credit cards. But maybe there is a better way to protect ourselves from fraud.

Re: risks of accepting international wire transfers?

Contact your bank, many, if not all, will have at the very least a different routing number to use for incoming wire transfers and possibly even a different account number so you don't risk your actual account info. If the separate account number is not available, I'd recommend having them open a second account for you that you use just for incoming wires and then you can transfer the money to your normal account.

Re: risks of accepting international wire transfers?

I would disagree that paypal is safer. It is not. The customer has the right and most often will win a dispute when a paypal payment is made and challanged.

A wire transfer is a one way deal. Once the money is in the bank... it's yours. It can't be recalled days later like a paypal payment can.

Talk to your banker. They will give you the full scoop. A good bank will also have a different routing number for inbound versus outbound wire transfers. That helps protect against fraud too.

Wire transfer is the ONLY way that my company will deal with people from Indonesia and Nigeria and several of the Russian satellite countries.

Just be very careful you do not give out any information to those people that is not necessary to initiate the wire transfer from their end.

We also keep a bank account just for incoming wire transfers, which we sweep the funds out of immediately. That way if an employee unwittingly were to give out too much info, we can close that account without having to jump through a lot of hoops for running our day to day operation.

Also if you deal with anyone in Europe, they will expect this. It's the norm over there. Businesses in the same towns do wire transfers and citizens do it to pay their bills.

Re: risks of accepting international wire transfers?

As an ex banker, I can tell you that wire transfers are the safest form of payment you can get, other than cash. Cleared funds means cleared funds i.e. instant cash. Giving out your account number and routing number, including the SWIFT id for international payments, has no risk to you.

In contrast, giving out ("confirming" in the case of phishing), your account login ID and passwords, almost guarantees fraud. Pre-signing checks is also risky although nowhere near as risky as giving out your account management details.

You do not need separate accounts for inward and outward transactions. You are just incurring extra bank charges and more administration costs for zero benefit. The banks love customers who have unnecessary extra accounts. It's money for jam.

I use international wiretransfers for many years for several additional reasons, that have not been mentioned so far:
1. For payments over approx. $1000 it's less expensive than PayPal (ca. $40, no % on the amount). In Germany, we don't pay for incoming transfers - unlike the USA.... outrageous $12 at Bank of America!!!
2. The money is immediately in the account, so no third party can keep it for a few days (weeks) to play with it
3. Usually, the exchange rates, if you're paid in a foreign currency, are much more favorable than Paypal's; even though Paypal is not too bad either.
4. When you are dealing with higher amounts (a few thousand Dollars and up), there is a great chance that PayPal's screening mechanisms will redflag a transaction and you have a real hassle.
5. PayPal is not available in many countries. Only alternatives than are Western Union etc. and they are really expensive.

The disadvantage is that the fees to initiate the transfer are to be paid by the customer, not the payee (me). I therefore usually lower the bill accordingly.

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